Omnicell, Inc. (OMCL) recently teamed up with Premier Purchasing Partners, L.P., the group purchasing arm of Premier Inc. Under the terms of the deal, Premier member hospitals and healthcare organizations will enjoy premium pricing for Omnicell’s medication and supply management solutions.
The agreement has a 36-months time period and is effective from July 2011. However, the financial terms of the deal were not disclosed. Omnicell expects this partnership to enhance its advanced medication and supply solutions and feature all other Omnicell solutions, particularly its G4 platform. The company expects this G4 platform to be the back bone of all its products and enhance the company’s medication management system and curtail administrative errors and inefficiencies that can harm patients.
Omnicell stands to benefit from favorable demographic trends, regulatory environments and a lack of nursing staff. As the information technology market is growing in leaps and bounds coupled with increasing investment from healthcare industries, Omnicell is confident about its success in the near to medium term, specially aided by its SinglePointe and Anywhere RN products.
Currently, an increasing number of institutions are planning to switch over to the automated mode by procuring medication and supply solutions to address the lack of nursing facilities in the US. Apart from the UCMC contract, Omnicell entered into several other partnerships to expand its business in 2010, including Wellmont Health System. Furthermore, recently OmniRx and SecureVault system were also selected by Sentara Healthcare and Deaconess Health System. The company also entered into a partnership with Cardinal Health (CAH) to support the CardinalASSIST automatic replenishment program.
However, constrained hospital spending remains a prime concern for the company. Moreover, the company faces intense competition in the medication management and supply chain solutions market from major players such as CareFusion Corporation (CFN) and McKesson Automation (MCK).
Presently, we remain Neutral on Omnicell.
CARDINAL HEALTH (CAH): Free Stock Analysis Report
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OMNICELL INC (OMCL): Free Stock Analysis Report
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